Weekly Housing Market Update: Home Sales Improve as Mortgage Rates Hover Below 7%

Although we’re three weeks into the new year, economic indicators coming out are still putting the final brushstrokes, or pixels, if you will, on our picture of 2024.

The December jobs report showed robust growth in employment and a dip in unemployment. Put simply, the labor market had a better-than-expected finish in 2024.

Meanwhile, inflation had a mixed finish. The bad: Headline inflation moved higher with 40% of the monthly uptick driven by higher energy prices. The good: Core inflation—a helpful indicator of underlying inflation pressure—moderated and shelter inflation steadied, suggesting ongoing, if slow, progress toward the Federal Reserve’s 2% inflation goal.

The Fed is likely to highlight this at its January meeting. I don’t expect any rate changes as the economy is in a strong enough position to enable the Fed to be patient in its approach to rate cutting.

December existing-home sales rose in the month and versus one year ago. Despite a third month of year-over-year gains, December’s sales were too little too late for the year. The early read on 2024 sales suggests that it was the lowest annual total in nearly 30 years.

Looking ahead, mortgage rates, which have been elevated in recent weeks, are likely to be an early-year headwind. However, we saw the 30-year fixed slip back under 7%. I expect to see home sales improve later in the year as mortgage rates settle.

It’s early in the year, but so far in 2025, we’ve seen the number of home sellers surpass year-ago levels. Realtor.com® weekly data shows that not only have active listings grown, but newly listed homes are also up, suggesting active seller engagement. As the share of mortgaged homeowners locked into rates under 6% slowly shrinks, I expect we’ll see more of this ahead.

I want to highlight two interesting analyses. Despite challenging conditions, Realtor.com examined a variety of real estate and local market factors to identify key areas of opportunity for first-time homebuyers. These markets are overwhelmingly in the Northeast and South. But even in these high-opportunity areas, first-timers will likely have to make trade-offs, which is why working with a real estate agent, who can help guide you through those considerations, can be helpful.

Finally, we took a look at homeowners association fees and found that among for-sale home listings, these became both more common and more costly in 2024.

You can find all the details, including full reports and our housing data for download, at realtor.com/research.